The coronavirus outbreak has led to countries go on lockdown, sealed international travel, and volatile market conditions. The situation is no different in India. In such times, taking care of your health and following the social distancing norms has become essential.
While you take care of your and your family’s health, it is also necessary to prepare and re-adjust your expenses. Doing this now will help you when the situation outside gets difficult. The following are a few tips that will help you manage your money amid the coronavirus pandemic.
- Increase your emergency fund
The coronavirus outbreak has impacted the world economy. Many businesses worldwide are facing a crisis. In such a situation, financial distress can arise at any time. This is when an emergency fund comes in handy.
An emergency fund is built to ensure that you do not have to use your savings in case of a financial crisis. It holds at least six months of your expenses. However, if your finances are not much affected due to the coronavirus pandemic, make sure that you contribute a small amount towards the emergency fund.
That way, if you were to experience financial turmoil in the near future due to this pandemic, you will have a substantial amount to take care of yours and your family’s expenses.
- Continue investing in long-term plans
While you contribute a small amount towards the emergency fund, continue to make premium payments towards your long-term investments. We understand that the money is a little tight, but your long-term investment plans will allow you to have a worry-free future.
The main objective behind starting a long-term investment (such as ULIPs) is to build your wealth and keep the financial future of your loved ones secure. Discontinuing the long-term investments will disrupt that objective, and put you in a financial turmoil.
- Review your health insurance
Just as you are evaluating your investment plans, it is important to evaluate your health insurance policy. Know that as per the Insurance Regulatory and Development Authority of India (IRDAI), all health providers in India have to cover the expenses of coronavirus treatment and testing.
But it does not hurt to confirm with your insurer whether this facility is included in your existing health insurance plan or do you need a specific rider to cover the same. Also, reevaluate the sum assured amount of the health insurance plan and understand its exclusions again.
- Review your monthly expenses
If you are still experiencing a financial crunch, try adjusting your monthly expenses. You can cut down on the luxurious expenses and unnecessary spending. Try setting a strict budget and force yourself and your family members to adhere to it. This will ensure that you have enough money to fall back on in case an impromptu expense.
We understand that these are challenging times. But managing your finances will help you through it. We again want to emphasise the fact that you should continue your long-term investments. Moreover, plan your future investments accordingly. You can consider investing in ULIP investment (ULIP full form is Unit Linked Insurance Plan) to avail benefits of insurance and investment under a single plan.
Lastly, having a sound expense management plan right now will allow you to have a secure financial future. So, start getting your finances in order, today!